Analysts give Lincare a breath of fresh air

Lincare Holdings Inc. recently got a glowing recommendation from analysts at Credit Suisse First Boston Corp., who urged investors to buy shares in the Clearwater home oxygen provider at its price Feb. 5 of about $48 per share. (Lincare closed Friday at $54.06, up 50 cents.) In addition to Lincare's 25 percent increase in earnings and strong cash flow in the quarter ended Dec. 31, the analysts predict good times for the company.

A cost-of-living increase from Medicare for oxygen reimbursement looks likely after several years of pricing cuts, the Credit Suisse report said.

And then there's the matter of a nagging government investigation into Lincare in California and Florida. In June, the company revealed that its employees were being questioned by a federal grand jury in Tampa. And since mid-1998, the U.S. Attorney's Office in Sacramento, Calif., as well as the Department of Health and Human Services' Office of Inspector General have subpoenaed documents from the company.

Though there is no news from the company on the assorted investigations, the Credit Suisse analysts take the position that Lincare will fare better now that there's a Republican in the White House.

"We continue to believe that resolution of both investigations is likely to be more rapid under the Bush administration than would have likely been the case under a Gore administration," the report said.

No one can accuse the company of lobbying for the change of administrations. Of thousands of dollars in campaign donations made by two of Lincare's top executives since 1999, only $2,000 was directed at the presidential election. The recipient of Lincare's largesse? The Gore 2000 campaign.